Cost of the Inland Rail project blows out to $31 billion

The review, led by Energy Security Board chair Kerry Schott, found that although the massive project promised many economic benefits, its implementation has so far been dogged by mismanagement and failures of governance, board oversight and risk and project management.

The Inland Rail is planned to provide a freight link between Melbourne and Brisbane via inland New South Wales, passing through Albury, Parkes and Narrabri. By displacing trucks, it is expected to reduce transport emissions by 750,000 tonnes a year by 2025.

But Dr Schott found problems besetting the project meant its cost had ballooned by an "astonishing amount" since 2020, from $16.4 billion to $31.4 billion.

"The project is late and over budget [and] there is insufficient certainty about the completion date and the final cost to have confidence in the current estimates," Dr Schott said in her report to the government.

The experienced public servants and business figure said the board appointed by the Morrison government to oversee the project did not have the necessary skills.

"Appointments to the board did not provide the skills required," Dr Schott said. "While ministers ... have every right to appoint whom they choose ... they also have an obligation to ensure that the business is governed properly and this means paying attention to the skills that are needed. Ministers of the former government did not meet that obligation."

According to the report, over the last 12 years successive governments have ploughed almost $2.6 billion into the project, while the ARTC has contributed $500 million.

Dr Schott found numerous management failings, including starting works "without knowing where it will start or finish".

Infrastructure and Transport Minister Catherine King said the report was an indictment of the previous government.

"To leave a project without a start or end point, with a significant budget blowout, and a board without the skills it required is shameful," Ms King said.

"They have let down communities and businesses which have already invested time, effort and money in the prospect of Inland Rail."